2021 Outlook: Afreximbank expects robust recovery for African economies

The Chief Economist of Afreximbank, Hippolyte Fofack, recently joined CNBC Africa to discuss the economic outlook for Africa in 2021. Despite the challenges posed by the COVID-19 pandemic in 2020, Fofack remains optimistic about the continent's prospects for a robust recovery. He highlighted the resilience of African economies and the various factors contributing to a positive outlook. Fofack emphasized that while the pandemic brought unprecedented challenges, African countries showed resilience in the face of adversity. In 2020, as the global economy contracted, Africa fared relatively better, with several countries still achieving economic growth. Fofack pointed out that six of the top 10 fastest-growing economies in the world were in Africa, underscoring the continent's potential for growth. The strong recovery in China and other major trading partners like India and the EU is expected to have a positive spillover effect on Africa, contributing to the continent's economic revival. Fofack also highlighted the unique nature of the current crisis, which involves both demand and supply shocks. Unlike the 2008-2009 financial crisis, the current situation has seen significant fiscal and monetary stimulus reaching the real economy, fueling optimism for a quicker recovery. Additionally, many African countries have lowered interest rates to support growth, a departure from previous practices focused solely on price stability. Multilateral support from organizations like the IMF and the AFDB has further bolstered the continent's recovery efforts. While the outlook for Africa's economic recovery appears positive, Fofack cautioned that the pace and extent of recovery will vary across countries. Countries heavily reliant on tourism may experience slower growth due to lingering consumer aversion to travel and hospitality services. Despite the challenges, Fofack remains hopeful about Africa's resilience and ability to bounce back from the crisis. One key factor that could influence the pace of recovery is the vaccination rollout. Fofack stressed the importance of widespread access to vaccines in enabling a swift economic rebound. Efforts to enhance vaccine production and distribution within Africa, in collaboration with global partners, are crucial to supporting the continent's recovery. Fofack's insights shed light on the complex dynamics shaping Africa's economic prospects and the concerted efforts underway to ensure a sustainable path to recovery.